Dendreon shares rocket on FDA panel support

CarolynPritchard

SAN FRANCISCO (MarketWatch) -- Dendreon Corp. shares had more than doubled in value by Friday's close after a Food and Drug Administration advisory committee concluded that the company's novel, experimental prostate-cancer drug Provenge was safe and effective.

The stock surged $7.71 to end the session at $12.93.

Earlier, the shares had changed hands for as much as $18.05.

Trading in shares of Seattle-based Dendreon
DNDN
was halted throughout Thursday's session as the FDA panel met to consider data on Provenge.

Dendreon is asking the FDA to approve Provenge as a treatment for asymptomatic men with advanced prostate cancer who have stopped responding to hormone treatment.

The drug represents a departure from currently approved cancer therapies, in that it acts by stimulating the body's immune system to fight the cancer using the patient's own white blood cells.

Though the agency isn't bound by the recommendations of its advisory committees, it typically follows them.

Noting that trend, Banc of America analyst William Ho said he believed Provenge could be approved by May 15. "Consequently, with potential worldwide sales of more than $1 billion we are increasing our target price to $20," Ho, who rates the stock a neutral, wrote in a research note.

Dramatic turnaround in fortunes

The FDA granted the Provenge application priority-review status in mid-January, pegging its review deadline at May 15. Priority review is intended for products that address unmet medical needs.

Dendreon doesn't currently have any products for sale. In 2006, the company posted a net loss of $91.6 million, or $1.27 a share, compared with a loss of $81.5 million, or $1.36 a share, in 2005. Revenue stood at just $273,000 vs. $210,000 the year before.

The FDA advisory committee on Thursday was asked if the submitted data established that Provenge was "reasonably safe" -- which it voted 17-0 in favor of -- and whether there was "substantial evidence" that Provenge was efficacious. Panel members voted 13-4 in favor of its efficacy.

The panel voted in favor of the efficacy, numerous analysts noted, only after the query was rephrased to reflect a question of substantial evidence. "The original question was phrased 'Does the submitted data establish the efficacy of [Provenge] in the intended population?'" Brean Muray Carrret & Co. analyst Jonathan Aschoff wrote in a research note.

"Fitting a post-hoc question to a desired answer is no better than fitting post-hoc statistic to a desired clinical result," wrote Aschoff, who reiterated a sell rating on Dendreon shares and said he believes the FDA will issue the company an approvable letter, essentially a request for more information.

Celia Witten, director of the FDA's cellular tissue and gene therapies division, said there was concern that both of the late-stage Provenge studies submitted for consideration failed to meet their endpoints, including the first study's primary endpoint of slowing the cancer's progression.

But that study, though small in size, "did show a survival difference," she said in a telephone interview after the meeting.

In the study, which evaluated 127 patients, median survival of Provenge-treated patients was found to be 4.5 months longer than those who were given a placebo.

The committee will want to see the results of an ongoing trial involving 500 patients, the final results of which are due out in 2010, Witten said.

"Today marks an important milestone for men with advanced prostate cancer," Mitchell Gold, Dendreon's chief executive, said in a statement issued after the panel's voted were tallied. "If approved, Provenge could become a breakthrough treatment for patients with advanced prostate cancer who currently have few treatment options. We look forward to working closely with the FDA."

Prostate cancer is the most common malignancy and the second-most common cause of cancer mortality in men.

The FDA had sought the committee's opinion on the persuasiveness of the data as well safety concerns over signs of increased incidence of stroke in Provenge-treated patients.

In addition to concerns over the failure to meet the primary endpoints, the agency said that African-American and Hispanic subjects were underrepresented in the studies.

And although Provenge was found to be "relatively well-tolerated" overall, with chills, fatigue and back pain as the most common side effects, the FDA expressed concern that patients treated with the drug showed a higher rate of cerebral vascular accidents, or strokes -- 3.9% vs. 2.6% in patients given a placebo.

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